You cannot install a Steam game offline. It needs to connect to the Steam servers the very first time to confirm you own the game.
If you do not want to redownload the game, go online, click install, let it go as far as where it starts downloading, close Steam completely and copy the files from the SteamApps folder on another machine, then launch Steam again. However, this process still requires an internet connection on first play.
Very, very simple answer if you have the time to do this, and an NTFS file system*.
*Don't know what this is? Easy: Do you have Windows Vista or 7? If yes, then yes. If not, then "maybe", and you'll have to poke around to see. Disclaimer: This works on XP systems as well, but I haven't done it for a little while. Process for XP is different.
- Keep Steam as it is. That's right, completely as it is.
- Cut and paste your sister's games from your STEAMAPPS folder (in your X:\Program Files\Steam folder) to her portable drive.
- Now open a command prompt. This can be found usually in the "Accessories" tab of your start menu, or some computers can just RUN a command called "cmd".
Enter the command "mklink", and press enter. It'll tell you that you can run a command like:
mklink /d "x:\program files\steam\steamapps\sister's game 1\" "s:\sister's game 1\"
Work out the appropriate file placement, then if it's all lined up right and you've filled in all the info as it should be according to where your Steam is installed, and where your sister's games are, press enter.
- Enjoy knowing that your sister's games are no longer taking room on your own hard drive.
Surprise Bonus Round!
Hey kids! Tired of your portable drive that you never unplug from having "performance issues"? This is because Windows tends to prevent disc write cache on any drive it's concerned may be unplugged without warning. By default, all USB drives count as this.
Want to milk better performance from it? Here's some easy steps*:
*Disclaimer: Though this process works on Windows Vista and Windows XP systems, it is slightly different to what is described below. Always use adult supervision when playing with your hardware settings!
- Make sure your drive is connected to a high-speed USB port. It's not worth doing this on an old USB-1
- Go to "My computer"
- Right-click the drive you have plugged in. Click "Properties"
- Go to "Hardware", and click on the drive you need to alter, and go to "Properties" again.
- Under "Policies", turn to "Better Performance".
This now means that Windows will start using your USB drive as a high-performance drive, like the ones inside the case. This also means that "bad things" can happen if you pull the drive out, without using the built-in Windows "Safely Remove Hardware" button, found conveniently near your clock, in your System Tray.
Thanks for watching, kids! And remember:
Spyware no spying!
Best Answer
Steam will work on an external drive, and will run perfectly fine as long as you're not trying to simultaneously run it from the computer's internal drive.
Note: Even though installing on an external drive means the games / client themselves are on the external drive, you may wind up with your saves or DLC on the computer, rather than the external drive. (Exact effect depends on the game.)
See also: Is it possible to install Steam games to two different locations?